By Richa Naidu

LONDON (Reuters) -Unilever is cutting about 1,500 fewer jobs in Europe than initially anticipated and hiring about 1,000 people, primarily those affected by its cost-cutting drive, for its soon-to-be spun off ice cream business, the head of the company’s European Works Council told Reuters.

The British company, whose shareholders include billionaire activist investor and board member Nelson Peltz, has been trying to streamline its business over the past year under CEO Hein Schumacher.

Prior to his apppointment, Unilever had underperformed for years and was criticised for allowing its brand portfolio to grow to around 400, leaving management with too little time to focus on its best performers.

Some investors had also said Unilever was too slow to revive margins in the wake of the Covid-19 pandemic and needed to become leaner.

Unilever said earlier this year it would axe 7,500 jobs globally as part of a restructuring to save about 800 million euros ($845 million). It also said it would spin off its ice cream unit which is home to brands including Ben & Jerry’s and Magnum.

Unilever’s European Works Council (UEWC) has strongly criticized those decisions, saying a realignment of the ice cream business could have been successfully managed within Unilever.

UEWC Chairman, Hermann Soggeberg, told Reuters exclusively on Friday that the company had, however, reached a deal in October with Unilever that would see a reduction of about 1,700 jobs having initially anticipated about 3,200 job losses in Europe.

“We have been negotiating intensively with the company throughout the summer,” Soggeberg said.

He said Unilever is still making the savings it promised to investors, but was able to significantly reduce the job cuts in Europe through savings projects from 2022 to 2024 and not hiring externally.

Soggeberg said about 1,000 additional jobs will be offered at Unilever’s European ice cream company primarily to employees affected by job cuts in the rest of Unilever’s business.

“They are planning for growth in ice cream,” Soggeberg said. “We agreed with Unilever that this process to hiring these people will be synchronized with the job cut program.”

The ice cream business’ spinoff is expected to complete by the end of 2025, London-listed Unilever has previously said, adding that it would move to a separate head office in Amsterdam.

“We remain fully on track to deliver the 800 million euros savings from our productivity programme,” a Unilever spokesperson said.

“When we announced the programme, we were determined to mitigate the impact of these changes on our people and so we are pleased that we have achieved this in Europe,” the spokesperson added.

($1 = 0.9464 euros)

(Reporting by Richa Naidu;Editing by Elaine Hardcastle)